Neiman Marcus aims to raise up to $100 million from an IPO

Neiman Marcus Inc., the operator of luxury department stores under the Neiman Marcus and Bergdorf Goodman brands, filed today for an initial public offering of stock and said it expects to raise up to $100 million.

Neiman Marcus said in the filing that it sold $774.5 million online in the 39 weeks ended April 27, 2013, up 15.8% from $669.0 million for the year-earlier period. For the fiscal year ended July 28, 2012, it said online revenue rose 16.1% to $878.8 million from $757.1 million a year earlier.

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The company said total revenue including retail stores was $3.53 billion for the 39 weeks ended April 27, up 5.7% from $3.34 billion in the year-earlier period, as net income rose 6.4% to $160.8 million from $151.1 million. For the fiscal year ended July 27, 2012, total revenue rose 8.8% to $4.35 billion from $4.00 billion. That means web sales accounted for 20% of revenue during the last fiscal year.

As of April 27, the company said it operated 41 full-line Neiman Marcus stores, two Bergdorf Goodman stores (both in New York City) and 35 off-price, smaller-format Last Call stores.

Neiman Marcus is a subsidiary of Newton Holding LLC, which is controlled by investment firms TPG Global LLC and Warburg Pincus LLC. TPG Global and Warburg Pincus acquired the retailer in a leveraged buyout for $5.1 billion in 2005. The retailer conducts its operations through its wholly-owned subsidiary, The Neiman Marcus Group Inc.

The company says in an S-1 filing with the United States Securities and Exchange Commission that the shares in the IPO will be offered and sold only by existing shareholders, and that the company itself won’t receive any of the proceeds should the offering go ahead as planned. The company didn’t provide details on the number of shares to be offered, the date of the stock sale or the projected price range.

One stock analyst who asked to remain anonymous says the shareholders may feel that the company doesn’t need to receive proceeds from a stock offering because of its strong net income. Nonetheless, he says it’s highly unusual for a company to offer such a small percent of its value in a stock offering—in this case, less than 2% of its value based on the $5.1 billion buyout. The analyst adds that existing shareholders appear to be following a strategy that will let them take capital out of the company, while expecting to improve the company’s liquidity by entering the public market. The strategy probably also includes expectations of having follow-up stock offerings at rising stock prices, the analyst says.

News of other retail industry public stock offerings can be found here.